New Zealand inflation hits 4.1% amid rising fuel costs

New Zealand’s annual inflation rate reached 4.1% in the June quarter, driven largely by rising fuel costs. According to Stats NZ, petrol prices increased 20.1% during the quarter, while diesel prices surged 47.7% quarterly and 71% annually. If fuel prices had remained stable, the annual inflation rate would have been estimated at 2.9%.

The fuel surge has impacted the transport, postal, and warehousing sectors, contributing to a 2.9% increase in business input prices. This rise in costs has also affected aviation and road transport industries.

Concurrently, a report from the New Zealand Council of Trade Unions (NZCTU) highlights the human impact of the cost-of-living crisis. The survey indicates that working New Zealanders across all income brackets are facing significant hardships, with many skipping meals, delaying medical or dental appointments, and using savings to cover basic necessities.

While the Treasury reports a brighter near-term fiscal outlook with a projected $6.8 billion deficit for 2026-27, economic experts warn that New Zealand’s long-standing productivity issues and global oil shocks continue to pose risks to sustained living standards and economic growth.